182 F.

2d 787

UNITED STATES,
v.
5.42 ACRES OF LAND, MORE OR LESS, SITUATE IN
ATLANTIC CITY,
ATLANTIC COUNTY, N.J., et al. (ICE-CAPADES, Inc.,
Intervenor).
No. 9878.

United States Court of Appeals,

Third Circuit.
Argued Oct. 13, 1949.
Decided June 1, 1950.

W. Louis Bossle, Camden, N.J. (Walter S. Keown, Camden, N.J., Andrew

E. Sheridan, Pittsburgh, Pa., attorneys for Ice-Capades, Inc., on the brief),
for appellant.
John C. Harrington, Washington, D.C. (A. Devitt Vanech, Assistant
Attorney General, Alfred E. Modarelli, United States Attorney, Newark,
N.J., Sidney Kaplan, Special Assistant to the Attorney General, Roger P.
Marquis, Attorneys, Department of Justice, Washington, D.C., on the
brief), for appellee.
Before BIGGS, Chief Judge, KALODNER, Circuit Judge, and FEE,
District judge.
BIGGS, Chief Judge.

During the years 1941 and 1942 Atlantic City, New Jersey, owned Convention
Hall situated on the Boardwalk. The City rented Convention Hall to
organizations wishing to use it. In the summer of 1941 Ice-Capades, Inc. had
occupied the main hall of Convention Hall under a short-term lease from the
City. On March 10, 1942 the City and Ice-Capades entered into another lease
whereby the City again rented the main hall to Ice-Capades for the period from
July 24 to September 6, 1942 at a specified rental of 36% of the gross

admissions to be received from the carnivals that Ice-Capades planned to

present there. It was agreed that the City should ' * * * make every reasonable
effort at all times to give good ice for use of rehearsals and presentation of
shows'. Storage and office space were also included in the arrangements. Other
provisions of the agreement need not be recited here. About the end of June,
1942 Ice-Capades began to make use of the storage and office facilities in the
Hall.
2

On July 16, 1942 the United States filed a petition in condemnation 1 in the
court below seeking immediate possession of Convention Hall, less certain
rooms not here pertinent. The United States was granted possession on July 16,
1942 and the United States Army moved into the Hall and remained in
possession for the entire period covered by Ice-Capades' lease. The United
States took Ice-Capades' entire lease-hold interest. Nothing was left. See United
States v. Westinghouse Elec. & Mfg. Co., 70 S.Ct. 644,2 and the discussion
therein of United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357,
89 L.Ed. 311, 156 A.L.R. 390, and United States v. Petty Motor Co., 327 U.S.
372, 66 S.Ct. 596, 90 L.Ed. 729. Ice-Capades moved its performers to Hershey,
Pennsylvania and held its performances there.

On July 31 Ice-Capades entered an appearance in the pending suit. Thereafter,

the United States and the City arrived at an agreement3 under which the United
States leased the Hall for a period from July 1, 1942 to June 30, 1943 at an
annual rental of $75,000. The United States then moved to dismiss the petition
for condemnation and sought the return of its deposit. Ice-Capades filed a
petition, sub the main proceeding, alleging a lease-hold interest, seeking
damages for its taking, and requesting the appointment of commissioners to
determine the amount of just compensation due to it. The commissioners
awarded Ice-Capades $12,000. Both the United States and Ice-Capades
appealed this award to the court below where a trial was held with a jury. See
50 U.S.C.A. 171, and N.J.S.A. 20:1-16, 22. The jury, according to a docket
entry and the briefs of the parties, returned a verdict of 'no cause of action'. We
will treat this as a verdict of 'no damages', assuming it to have been molded into
that proper form by the learned District Judge.4 Ice-Capades has appealed.

At the trial the learned District Judge held that the value of Ice-Capades' lease
for the purpose of condemnation was its worth on a fair and open market, not
its value to Ice-Capades or to the United States. See United States v. Toronto,
Hamilton & Buffalo Nav . Co., 338 U.S. 396, 402, 70 S.Ct. 217, and United
States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 87 L.Ed. 336, 147 A.L.R. 55.
It followed, naturally, that the court did not allow evidence to be introduced by
Ice-Capades to establish the value of the Hall to it as a place for holding

rehearsals. This evidence was properly excluded. A persuasive analogy in

support of this ruling is suggested by words employed by Mr. Justice
Frankfurter in Kimball Laundry Co. v. United States, 338 U.S. 1, 5 and 6, 69
S.Ct. 1434, 93 L.Ed. 1765, 7 A.L.R.2d 1280. See also Omnia Commercial Co.
v. United States, 261 U.S. 502, 508, 509, 43 S.Ct. 437, 67 L.Ed. 773. But the
learned trial judge did permit evidence to be introduced by Ice-Capades which
was intended to demonstrate an increase in the market value of the lease as of
July 16, 1942 (the day of taking) because matinees, if held, would have been
attended by members of the Armed Forces who had come to Atlantic City in
increasing numbers after March 10. This testimony, as presented, was
somewhat remote from the issue and obviously was deemed to be of little
weight by the jury.
5

Ice-Capades also offered testimony as to expenses incurred by it in moving into

and out of the Hall. This was inadmissible under the rule laid down in United
States v. Petty Motors Co., 327 U.S. 372, 378, 66 S.Ct. 596, 90 L.Ed. 729, and
was rejected by the court below . Evidence as to the cost of printing programs
by Ice-Capades also was not admitted and this ruling finds obvious support in
the Petty case. The court permitted testimony to be given, however, as to the
sums expended by Ice-Capades in advertising the carnival in Atlantic City. The
question as to whether or not such evidence was properly admissible is a
difficult one but in view of the jury's verdict we need not discuss it.

The court's charge followed in substance the legal principles which governed
its rulings on the evidence. There was no substantial deviation. Ice-Capades
may not complain of the fairness of the charge. Any error therein was to the
advantage of the appellant. The court properly stressed, as the governing
principle of the case, the fair market value of the lease at the time of the taking.

On appeal here Ice-Capades contends, in substance, that the court below erred
in treating the lease as having no special value, i.e., no value other than fair
market value, and, conversely, in laying down fair market value as the test. But
there was undisputed evidence as to the market value of the lease as of March
10, 1942 when the agreement was made by the City and Ice-Capades, viz.,
36% of the gross admissions. It is clear that a calculation of the value of the
lease as of July 16, 1942 (the day of taking) could be and was based on this
evidence. It should be pointed out also that there was testimony that the value
of the lease was the same on March 10 and July 16, 1942, and also some
evidence, offered by the United States, that the value of the lease had
substantially depreciated by July 16, 1942. The jury in arriving at its verdict of
no damages was not wide of the mark.

Exceptional circumstances may be considered in arriving at just compensation

under the Fifth Amendment for an interest taken by condemnation. See the
Miller and Toronto cases and Boom Co. v. Patterson,98 U.S. 403, 408, 25
L.Ed. 206. We think it is settled, however, that the compensation for property
condemned for public use is to be determined by market value where such a
standard is readily available. See the Petty case and Kinter v. United States, 3
Cir., 156 F.2d 5, 7, 172 A.L.R. 232. Where market value for an interest taken
by condemnation is easily ascertainable the jury should not be permitted to
speculate as to the possible impact of other conceivable factors on the amount
of 'just compensation'. This must be the rule when items said to show a special
value in the interest taken are as remote as in the instant case. Emphasis is laid
on the fact that Ice-Capades makes no assertion that the lease was not fair in its
terms, was not arrived at by arm's length bargaining, or did not adequately
represent market value when it was executed. As was said by the late Judge
O'Connell in the Kinter case, 156 F.2d at page 7, in stating the governing rule, '
* * * it is the 'value of the interest' that is guaranteed; not the investment', to the
owner.

We can perceive no substantial error in the rulings or charge of the trial court
which would require reversal. Accordingly the judgment will be affirmed.

This is the main action at bar, being Miscellaneous No. 489a in the court below

Decided April 17, 1950

Neither the agreement nor the lease between the City and the United States was
made part of the record because it was stipulated by counsel for the parties that
any interest possessed by Ice-Capades was not affected by the agreement or the
lease

No question is raised by either party as to the form of the verdict